While some construction industry research and information providers like JLL have predicted an overall slowdown in the rate of construction growth in the coming years, one sector within the construction industry has emerged as a star — the industrial segment.

The industrial sector has experienced the lowest vacancy rates in 16 years, according to JLL. The company also found that 18% of Q3 2016 leases were for newly built space, an encouraging metric for the construction industry.

E-commerce has driven a significant portion of the warehouse/distribution component of the market, a phenomenon that is part of the “Amazon effect,” which refers to the internet giant’s impact on pretty much everything to do with warehousing, ordering and shipping merchandise in the age of the internet, according to Kent Newsom, executive vice president of Ridge Development at Transwestern.

“Retailers are trying to figure out how to adjust to it,” Newsom said. In the Dallas metro area, he said, Amazon alone has approximately 4 million square feet of warehouse and distribution space.

The Pentagon, as the government’s largest buyer of goods and services, is ending a seven-year drawdown of acquisition spending, according to a study released last Wednesday.

“The tide has definitely turned in the direction of contract spending,” wrote a team directed by Andrew Hunter of the Center for Strategic and International Studies.

Defense Department fiscal 2016 contract obligations increased by 7 percent over the previous year, “far higher than predicted,” said the analysis of the outlook for spending on research and development, defense acquisition reform and procurement performance-based data from the Federal Procurement Data System.

Significant boosts in spending commitments were recorded by the Missile Defense Agency, the Air Force and the Navy, “driven primarily by increased obligations for large procurement programs like the C-130J transport aircraft, the KC-45A tanker aircraft, and the Trident II missile program,” CSIS said. “Even the Army, which had declined far more steeply than DoD overall throughout the budget drawdown, was virtually stable between 2015 and 2016.”

The undersecretary of the Army today pledged last week to win the trust of the defense industry as part of a new strategy to rebuild the service.

Karl Schneider said Congress has promised help the Army modernize and grow its end-strength on one condition: the Army must reform the way it does business with the defense industry.

“Maintaining our advantage as the world’s most dominate land force requires that we re-imagine how we work with the defense industry,” Schneider told an audience on Mar. 14, 2017 at the Association of the United States Army’s Global Force Symposium and Exposition in Huntsville, Alabama.

“Our focus must be on providing solutions and solving problems, not simply on checking a list of requirements.”

The Pentagon’s gargantuan needs for private-sector support have fueled a sector of the defense contracting market known as professional services. This is an industry dominated by large firms but also one where very small companies — even those with just a handful of employees that have the right skills and background — have competed well.

By virtue of the increased demand for technical and professional support services at defense agencies and military commands, clusters of small business contractors have sprouted around the country. In areas like Hampton, Virginia, for instance, lucrative contracting opportunities from U.S. Air Combat Command have lured dozens of companies, many owned by military veterans and former government executives.

So it came as a complete shock to these companies when Air Combat Command announced earlier this year that it would jettison the current process for hiring support contractors and transfer the work to a pool of firms selected by the General Services Administration. The GSA vehicle, known as “one acquisition solution for integrated services” or Oasis, is one that that Pentagon and other federal agencies have begun to adopt. More than $1.3 billion worth of Defense Department contracts already have migrated to Oasis since the program was launched in 2013.

Air Combat Command, now an Oasis customer, has informed contractors that it would discontinue its “contracted advisory and assistance services,” or CAAS, multiple-award contract. This has caused consternation among small businesses that currently are prime contractors under CAAS or other Pentagon-unique programs.

The Association of Procurement Technical Assistance Centers (APTAC) reports that businesses, nationwide, won 73,000 government contracts worth $12 billion, thanks to the assistance provided by the network of procurement technical assistance centers (PTACs). Small businesses won 88% of these contracts.

There are 300 PTAC offices across the country, plus in Guam and Puerto Rico, and each one is supported by a local host organization that provides funds matching the support granted by the Defense Logistics Agency (DLA). APTAC estimates that the return-on-investment is $344 for every federal dollar invested in the PTAC program.

Through the free or low-cost assistance provided by PTACs:

57,000 businesses – located in all 50 States, the District of Columbia, Guam and Puerto Rico – were educated in the past year through one-on-one counseling sessions, electronic tools, and training seminars on how to do business with the government.

The equipment and supply needs of our country’s warfighters are supported – and the nation’s industrial base is boosted – through the influx of businesses seeking to compete for government contracts.

Help is targeted toward small businesses, especially veteran-owned businesses, women and minority entrepreneurs, and businesses located in economically depressed HUBZones.

PTACs contribute not only to the success of small businesses, they also help government agencies and large businesses. For example, PTACs:

Support initiatives by the Department of Veterans Affairs to make more veteran-owned firms “procurement ready.”

Boost vendor registrations in the General Services Administration’s System for Award Management (SAM).

Show businesses how to use DLA’s Internet Bid Board System (DIBBS), radio frequency identification (RFID) tagging and unique identification (UID) marking.

Increase qualified sources, competition and create better value for the military, agencies and American taxpayers.

Stimulate local economic activity by helping businesses across the country navigate federal, state and local government contracting processes.

Educate businesses on how to meet stringent government standards and complex contract requirements.

Help large government contractors identify qualified subcontractors and suppliers to address their small business subcontracting requirements.

In Georgia, the PTAC is known as the Georgia Tech Procurement Assistance Center (GTPAC). In 2015 alone, GTPAC:

Served 2,568 businesses across the state, providing representatives of these firms counseling, instruction, and bid opportunities.

Sponsored 169 seminars and webinars, and participated in 52 events state-wide where more than 6,112 business people received instruction on how to effectively compete for government contracts.

Conducted 8,737 counseling sessions with small businesses as well as 368 counseling sessions with large businesses.

Assisted clients in winning 4,526 government prime contracts and 764 subcontracts worth a total of $1.2 billion.

For more information about APTAC and the national network of PTACs, visit www.aptac-us.org. For more information about GTPAC, including how to enroll as a client, please visit www.gtpac.org.

Senators John McCain (R-AZ) and Jack Reed (D-RI), the chairman and ranking member of the Senate Armed Services Committee (SASC), recently held a series of very important hearings regarding the need to make fundamental changes to the structure and substance of defense management.

Among those who were called to testify were Arnold Punaro, an influential defense expert who once served as the SASC staff director; Norman Augustine, the widely respected former chairman and CEO of Lockheed Martin Corporation; Dr. Jacques Gansler, a former under secretary of defense for acquisition, technology and logistics; and Michele Flournoy, a former under secretary of defense for policy.

Punaro had numerous observations and suggestions about the need to reduce the Defense Department’s infrastructure and overall overhead, while Augustine and Gansler spoke eloquently about the enduring problems facing the defense industrial base — many the inevitable result of defense acquisition policies that discourage new companies from entering the defense marketplace while simultaneously encouraging many in it to exit, as recently seen in the decision of United Technologies to divest its Sikorsky Helicopter unit.

But, perhaps the most significant observation regarding acquisition came from Flournoy, the former Pentagon policy chief, who noted that it was important that “the federal acquisition regulation (FAR) is not used as a means to prevent industry from being at the table to suggest solutions and inform the debate about what is technologically possible.”

The United States Department of Defense (DoD) recently published two new rules that impose broader obligations to safeguard information that falls within specified categories of sensitive data and to report cyber incidents to the government.

These rules generally apply to companies that have been awarded new DoD procurement contracts, that hold subcontracts under such DoD contracts, or, in some cases, that have been awarded other types of agreements with DoD.

modify the scope of data that contractors and subcontractors must safeguard and the universe of contractors and subcontractors to which the requirements apply;

establish requirements for contractors and subcontractors using cloud computing to provide information technology services to DoD, including requiring such contractors to keep government data within the United States, implement DoD-approved safeguards, and limit disclosure of and access to government data;

Defense Department Chief Information Officer Terry Halvorsen said that a recent trip to Silicon Valley reinforced the fact that the department will be looking to industry to drive innovation for the nation’s military. Not only will a closer partnership require DoD to move more quickly, it will require vendors to better understand DoD’s needs, he said.

Halvorsen said DoD will have to speed up acquisitions if it wants to work with some of the up-and-coming companies that work in a venture capital environment.

“Six months is a really long time for them,” said Halvorsen July 9 at the DoD CIO Mobility Industry Day, hosted by AFCEA’s Washington, D.C. chapter

The chairman of the House Small Business Committee introduced a bill that would include more categories for small businesses to get federal contracts.

The bill (H.R. 1481), introduced by Rep. Steve Chabot (R-Ohio), would increase the number of industries small businesses can compete for contracts as well as identifying new ways to attract small businesses in those new industry categories.

“Small business contracting policies are intended to make sure we have a broad spectrum of small firms working with the government across industries, and when those policies are undermined, it is imperative that we find appropriate solutions,” Chabot says in a March 20 statement.

For two years, the U.S. Army has been pitching new ways it could stay relevant and play a more prominent role in the Pentagon’s pivot to the Pacific, a region where the Navy and Air Force are expected to play a more prominent role. Now, after a turbulent year in which Russia invaded Ukraine over land and Army soldiers have deployed on high-profile missions to Iraq and Africa, there is a wider-spread recognition that the ground service will have a significant role to play after Afghanistan.

But despite this resurgence in missions, that doesn’t mean work will be easy to come by for defense companies. Defense firms descend on Washington this week for the Association of the United States Army, or AUSA, annual convention and arms exposition. This year’s gathering comes after the Army announced major changes to its makeup, including cutting tens of thousands of soldiers from its ranks. But it lands right when a leader like Army Chief of Staff Gen. Ray Odierno has signaled he will revisit those plans to shrink the force – and the budget — thanks to ISISand Russia.